San Diego's "Failures of Governance"
September 20, 2011 1:20 p.m.
The authors of "Paradise Plundered" tell us about San Diego's failures of governance.
Related Story: San Diego's 'Failures of Governance'
CAVANAUGH: This is KPBS Midday Edition. I'm Maureen Cavanaugh. If you think you've been handed a load of nonsense from politicians and city leaders about what's really going on in San Diego's government, you are not alone. The there ares of the new book, pair days plundered have examined the major problems effecting our city and county. In their analysis, they find our leaders have failed time and again in matters ranging from fiscal policy to wildfire protection. They say we haven't been told the truth, and suggest maybe we can't even handle the truth. Steve Erie is UC San Diego political science professor, and welcome to the show. And Vlad Kogan is a UC San Diego graduate student.
KOGAN: Thanks for having us.
CAVANAUGH: They together with coauthor Steve McKenzie have written paradise plundered, fiscal crisis and governance fail nurse San Diego. We're expanding this conversation to continue for the rest of the show. And we invite our listeners to join our conversation. Why has San Diego failed to solve its fiscal problems? Why do issues in San Diego like the airport or trash fees go on for years and years? Give us a call with your questions and comments. Our number is 1-888-895-5727.
Steve Erie, in your estimation, does San Diego government work anymore?
ERIE: No. San Diego government doesn't work, and it hasn't worked for quite a while.
CAVANAUGH: Okay. Why not?
ERIE: Well, it's a perfect storm. It's really three factors. The first is, we have a political culture of wanting public services and not being willing to pay for them. Two, we have short-sighted leadership that doesn't want people, it doesn't call for sacrifice in terms of things like raising revenue for needed public service, and a sense, the shortsightedness is both on the private and the public sector. And third, we have a set of institutions, whether it's term limits, the very high bar, the 2/3 majority required for tax increases that when you don't have the leadership, and you have a tax averse electorate maybe it very difficult to in a sense provide adequate services. San Diego spends per resident roughly 50% less than the other California big cities on basic services like police, fire, libraries and parks.
CAVANAUGH: In your analysis, what issue, Steve, exemplifies what's wrong with the politics and governance of San Diego?
ERIE: Well, you can see it right now with this proposal, this pension, comprehensive pension reform proposal that may be on the ballot. It's basically that it's not the voters who are being called upon to share the burden, but it's the public employees. And this particular measure, basically, it's the 401K doesn't save all that much money. Over 80% of the so called savings is the five-year salary freeze for those who are in the current pension system. Then there are a few accounting tricks as well. It's that kind of Tom foolery, that sort of misleading advertising on the part of political leaders that confused voters in terms of what the real problem is.
CAVANAUGH: We're talking about the new book, paradise plundered, and we're taking your calls at 1-888-895-5727.
Vlad Kogan, you're coauthor of this book. And San Diego didn't have the representation of tam no hall or Chicago style corrupt politics. Wee got beautiful weather, sunny beaches. How did things go wrong here?
KOGAN: That's a great question. One of the things -- the main arguments we make in the book is that our problems are not the result of corruption. They're not the result of people making stupid decisions. But they're the result of political incentives and political logic that leads to very bad outcomes. So you you're right, San Diego doesn't have a lot of these problems we see in the older frost belt cities. But San Diego is unique. First, historically, San Diego, a lot of our costly public infrastructure, improvements, when you think of the port, the airport, when you think about our water system and how we get water from the Colorado river, it was funded by the government, but it was funded by different government. So it was funded by the federal government, a lot of our -- the big firms, our economy is the result of public university it is funded by the state. So a lot of the serves we have been paid for by somebody else. And over decades, I think San Diego voters have gotten used to getting very good services, getting very good public infrastructure, and not having to pay for them. And second, the thing that makes San Diego unique is political institutions like prop 13, that make it very, very difficult to raise the bar to increase taxes. So on one hand, you have residents who've gotten used to getting pretty good services and not paying a lot for them, and on the other you have rules that make it difficult to raise revenue in the future. And that creates as Steve said a perfect storm that leads to ruin.
CAVANAUGH: I want to talk more about an issue that Vlad brings up that you talk about in the book as a really ironic side of San Diego. There's a feeling in the popular San Diego politics is riddled with a distrust of government. But that's -- you make the point that various governments are one of the reasons that San Diego is the big city it is.
ERIE: It's the central paradox of San Diego politics. San Diego is a product of big government. It was Navy town U.S. A. You look at who expanded the airport, who first brought water to San Diego, in addition to the massive federal investments in the 20th century, you also had state investments in the university system that we have here that is very, very good. And yet, given this history of dependence upon government for economic development, we have this incredible distrust of local government. I talk to people all the time about the waste fraud and corruption in San Diego politics. And the problem is, if you under fund government long enough, it doesn't work. And when it doesn't work, right, in a sense it compounds the problem of public distrust with government. So there's this disconnect between how we were built with massive public investments and in a sense how we treat local government today.
KOGAN: And if I could piggyback on that, if you look at the big projects today that the business community says are critical to San Diego's economic future, we have a proposed expansion of the Convention Center, a proposed chargers stadium, and both those projects are going to require massive public investment. And it's interesting that the same members of the business community who are so critical of San Diego, of politicians, and of the San Diego fiscal position are also the ones who are really cheer leading these projects and cheer leading these public investments. So it really is a paradox.
CAVANAUGH: I want to tell everyone we're inviting your calls at 1-888-895-5727. Kristen is calling from Carlsbad. Good afternoon, and welcome to the show.
NEW SPEAKER: Thank you.
CAVANAUGH: What's your --
NEW SPEAKER: My name is Christine.
CAVANAUGH: Oh, yes, thank you for calling. What's your question?
NEW SPEAKER: Well, it's not really a question, just really a statement. I'm a native San Diegan. I was born in 1957 in mercy hospital. I've seen a lot of mismanagement. It seems like there's a lot of self interest in the public that are running the city. I don't understand why they had thought it was more important to billed a new stadium than pay attention to the infrastructure. The sewer pipes that have burst, and polluted the bays, and we could use some new libraries. The roads are a wreck. And now there's even proposals for more stadiums? That's just nutso. The priorities in my opinion are all screwed up.
CAVANAUGH: Christine, thank you for the call. I just want to tell everyone, your book, paradise plunders Steve and Vlad is very hard on the city's redevelopment decisions that have created so many new buildings or Petco stadium. Now we're talking about an expanded Convention Center. Don't these projects improve San Diego?
ERIE: They improve downtown. The thing is, San Diego does redevelopment differently than any other California city. We have a separate nonprofit corporation, a little bubble, where all of the benefit, the tax increment financing, the projects are captured downtown. Other places, they're city wide agencies. And there are political impressions from voters and public officials to spread the wealth. And to public projects rather than private projects. It's a little bit like the land of oz, here's, we have this marvelous emerald city downtown. You go to the neighborhoods though, where in a sense the redevelopment dollars have not been put, and they're suffering.
CAVANAUGH: Let's take another call. Chuck is calling us from mission valley. I want everyone to know our number is 1-888-895-5727. Hi chuck. Welcome to the show.
NEW SPEAKER: Good afternoon.
NEW SPEAKER: I'd like to ask your guests if they could discuss the trailer park down on mission bay. How that's developed and what the city's fiscal arrangement is and benefits are around that enterprise.
CAVANAUGH: Well, thank you for the request, chuck.
ERIE: I'm afraid in 360 pages and in 200 years of San Diego history, we go back all the way to the Spanish days, we weren't able to spend much time on the trailer park down there.
CAVANAUGH: By Mission way.
ERIE: In mission bay. But actually, chuck, if you'd just give us a little bit more information, maybe then in a sense we can talk about it.
NEW SPEAKER: It's my understanding that it was gifted by the state to the City of San Diego with the idea of public use. And the city then leased the trailer park to a developer who turned it into a trailer park and gave the city a cut, and has done that. Upon the city then decided or the state decided they wanted the city out and turned it into a public use. And the city's response was to raise rents and try and kick people out.
CAVANAUGH: Okay, thank you chuck, for that. That story is not included in your book. And I just want to say, maybe we'll do something on that later. But the issue of development and developers and deals, you call San Diego kind of a Potemkin village. What do you mean by that?
ERIE: Well, a Potemkin village, Catherine the great, when she went down to visit the newly conquered provinces down in Crimea former minister, Gregor Potemkin, arranged for the peasants to put up beautiful, sort of. Like, Hollywood movie set, that from a distance, all these villages looked far more prosperous than they really were. That's what this is. San Diego on the surface, people think it's fabulous, beautiful, downtown. The question is the dry rot in terms of public services and infrastructure. We have an unaccredited fire department. We have the smallest police force in the country. And the murder rate is now starting to tick up again. We have problems with maintaining our parks. Look at the future of Balboa Park. We're talking -- we're building this marvelous story-book library downtown, and we're cutting back on library hours and talking about closing libraries in the neighborhoods. So there's this disconnect between the wealth, the affluence, and by the way, there's a marvelous private sector story here in terms of high-tech development spawned by places like UC San Diego. But when you turn to the public sector, you look at a grim and increasingly visible civic reality of inadequate public services and infrastructure. That's what we mean by Potemkin village.
CAVANAUGH: Vlad, we are told time and time again below the taxpayers are asked for their money to go into a redevelopment project whether it's a stadium or whether it is to pay for chargers ticket, we did that for a while, that this is going to come back, and we're going to reap a lot of financial benefits from that extend tour. Do the taxpayers actually get any benefit out of these things? Did you find that in your research?
KOGAN: We looked at the big projects like Petco Park, and so it's definitely true that there is a subset for the taxpayers who get a whole lot of benefits, and those tend to be the tourism industry or the developers who do the projects. And the costs are born by residents city wide. This is money we could be spending to up great public infrastructure that benefits a broader array of people. So we tend to have projects that promise voters that this is not gonna cost you anything. In fact, they do end up costing voters quite a bit and create a whole lot of benefits for very, very narrow wealthy and affluent minority in the city while the rest of the city really suffers as a result.
CAVANAUGH: We're taking your calls at 1-888-895-5727. Manny is calling from San Diego. And good afternoon, Manny, welcome to the show.
NEW SPEAKER: Thank you. I'm listening with great interest to what the two gentlemen are saying. I take issue with the sense we need to increase the level of taxation on the citizens. When you look at what's being paid out through various fees, state, federal, local, it's not a question of under taxation. It's a question of bad governance. And the responsibility for that, I feel, falls upon us as citizens. We absolutely need to devote more time finding out what the issues are, what our elected representatives are doing in our name, and somebody involved in the small business I talk to small business owners. We're not in favor of Petco Park or these crony capitalist programs any more than we're in favor of a bureaucratic growth in government so that we end up with government like they have in chick economic and Detroit. I think he's creating a strawman as far as what the business community is about.
CAVANAUGH: Manny, thank you for that. And this is the argument against increasing taxation.
ERIE: Well, it's the small business community as opposed to the downtown large business community. And taxation, if you take away federal taxes and state taxes, but just look at local taxes, for example the whole debate about sort of free trash collection for homeowners. And the People's ordinance of 1919, well, are we pay property taxes. Well, I'll tell you, the city gets $0.17 of every property tax dollar. In Los Angeles, it's 26%, in many California cities, it's 35%. We lowered the rate back in the Pete ERIE day. We don't get that. Business license fees, Manny, a billion dollar gross corporation pays in terms of annual business license fees about $3 million in Los Angeles. In San Diego, $24,000. You know, relative to other places, you may feel very taxed including local taxes. But relative to other places that provide a much bigger array of public services, we don't have the utility users' tax. All other California big cities do. The TOT, we're finally raising, right, the tax on tourists who come down. But it's being ear-marked for special projects downtown. We had two votes on whether we were gonna give it to the fire firefighters for fire protection. And in neither case, could we get that 2/3 vote that was required of given the nature of things.
CAVANAUGH: And what do the other cities who have those higher level of taxation, what do they do with that money? What level of service can they provide?
ERIE: Well, they have a county fire department in Los Angeles. They have -- they repair their streets. The pot holes, you know, you talk about Potemkin village pot holes, that's San Diego. The streets get repaired. The water systems get repaired. Things are provided. Look, in life, you get what you pay for. And we cast aspersions about Chicago. And I wrote a book on the big city machine. I know a little bit about Chicago. My great uncle was an expediter for the upper daily. In Chicago, everything is cost plus 10%. That is basically you tie tithe, the machine tithes all projects, etc. But the city works. If have you ever gone to Chicago and seen the level of public services? The amount of public benefit? Look at millennium park. It's a place where leaders have educated the public about the value of paying for good public services. Of the we don't have that. And I don't think we're likely to get it in San Diego. We're a little bit like the frog in the water, as they turn up the heat, you know? And as long as the sun comes out, I don't think people are going to complain. What's going to happen with the next wildfire? And one where the Santa Ana winds don't stop after a day or two and it goes to the coast? We are woefully unprepared for things like that.
CAVANAUGH: I'm speaking with two of the coauthors of the new book, paradise plundered. Steven Erie, and Vlad Kogan, this is KPBS Midday Edition. They together with coauthor Steve MacKenzie have written the new book, paradise plundered, all about public policy in San Diego, and what the requires say are the consistent failures of San Diego's leaders to address some of our region's most important issues. We're asking our listeners to call with questions or comments on the way San Diego has been governed. The decisions our leaders have made, the choices we've made as voters. Our number is 1-888-895-5727. Before we go to the phones, I just want to talk about a sewage spills. We just had a major sewage spill because of the blackout that happened ten days ago. What is San Diego's track record on sewage and waste water?
KOGAN: Historically, it's ironic, if you look now and compare the data on spending for sewage, San Diego spends far more than the other major California cities, and you would think it must be because we care about the environment. But if you look at the history, the reason why this is the case is because for many, many years we have dragged our feet in complying with federal, state clean water laws, and it took a judge in the 1990s to come in and put the gun to the city's head and say you have to start spending to fix the pipes to prevent sewage spills so we've gotten better. And we've gotten a lot better, the recent spill not with stand, but it certainly hasn't been because we want it to. It's because the Court stepped in and made us do it.
CAVANAUGH: Isn't -- we don't need secondary treatment here because we have some sort of shelf in the ocean and our waste water goes beyond that shelf? That's how the city leaders explained that whole exemption to us right?
KOGAN: There's certainly a lot of reasons for why it's the case. And the city fought very, very hard to get that exemption. And required an act of Congress to allow the city to dumping this partially treated water into the bay. But that's really a separate issue from the quality of our sewage pipes, which when we talk about, we're talking about untreated water before it gets to the plant being dumped.
CAVANAUGH: Exactly. And we're taking your calls at 1-888-895-5727. Lanel is calling us from San Diego. Welcome to the show.
NEW SPEAKER: Good afternoon, thanks for taking my call. I just wanted to concur with the gentlemen, the guests that you have on who made the assertion about if you starve out deprived city coffers and county coffers or whatever long enough, they become dysfunctional. They no longer work. And I can't agree enough with him. And I just wanted to know, confirmation, if anyone knows, my understanding is that Ace parking pays no taxes to the city. They pay nothing. My understanding also is in Carl DeMaio district, curiously, there are some 14,000 individuals who reside on gated roads, private roads, in La Jolla, which admittedly is an affluent neighborhood, Zip Code, and they receive free trash pup. And more over, they get it twice weekly. I heard that.
CAVANAUGH: Lanel, I'm sorry, do you have one more thing?
NEW SPEAKER: Yeah, I had a couple more things. I just was really concerned -- I happen to have a cousin that resides in the state of Minnesota, and recently retired out, he was a surveyor for the Minnesota highway patrol. Worked on the bridge that fell down. And this could cause fatalities. People are not understanding, that when we do not repair crumbling infrastructure -- it's a public safety issue.
CAVANAUGH: You're right, lanel. And we have to move on. We have so many people who want to join the conversation. We don't have confirmation on the kind of taxes the Ace parking people pay, but --
ERIE: Well, we have a history of what we call sweetheart leases in San Diego where city land -- and understand that San Diego's patrimony way back when was the pueblo lands, thousands and thousands of acres of public lands that's why we have the scientific park outside of UCSD. That's how we have UCSD. That kind of city lands are frequently sold for a song, were leased for next to nothing. That means we haven't gotten the return I don't know about the Ace situation. We'd have to sort of investigate that. But the other thing about the gated communities and trash pup, that sort of the current controversy because the mayor is attempting to stop free trash service, and you would think they were like stuck pigs squealing about that they pay for these services because of their property taxes. Go to a place like Los Angeles, there is full cost recovery. It's not the property tax. You pay a charge for trash collection. But here, it's viewed as a birth right. There is this sense of entitlement in San Diego that goes back a long ways. And that in a sense our current taxes, though many of them go not to local government but to state or federal government, should -- and because the cost of living and the cost of housing is so high, we should get these services. Well, it doesn't quite work that way. You've got to pay for what you get.
CAVANAUGH: Vlad Kogan, the book paradise plundered is hard on a group of political leaders that you call the new fiscal populists. Who do they promise voters?
KOGAN: In the book, we identify this movement both on the left and on the right of political leaders who come to the citizen and say, now, San Diego has a lot of problems. We have unfunded pension liability, and it's because either I'm a left because of the insiders on the ideals or on the right because of public employees and greedy public employees that are screwing the citizens and the citizens are the victims and if only you stood back and undid these bad deals, everything would be -- you could have all the serves you want without having to pay more for them. And they promise voters literally something for nothing. And in reality, I think the situation is a lot more complicated than that. A lot of our problems today, including the pension liability really goes back to decisions that were made precisely to give voters what they wanted, which was public services and not pay for them. For example, by taking money out of the pension fund to pay for public projects instead of raising taxes. So we have a history of political ladders who instead of telling the voters that if this is what you pay, is this what you get, promise them that they'll get the services that other major cities get at a lower cost. And over time, I think the voters began to expect that. And that creates a lot of political problems and a lot of political challenges for really riding the city's budget problems.
CAVANAUGH: Steven, that goes back to the issue you were talking about, you were arguing that the leaders need to educate the populous about what -- where this money is going, what it's needed for, and what's the responsibility thing to do.
ERIE: The amazing thing is that San Diego leader vs not called for hard sacrifice from voters since World War II. There is sort of -- we can get through it, there's light at the end of the tunnel. With we're going to balance the budget, you know? It's like a mirage in the desert. It just keeps going further and further and further in front of you. You go to other places, a good friend of mine is a county supervisor up in Los Angeles, and there were issues about funding county fire to the tune of $900 million a year, and it required a 2/3 vote. Every single member of the board of supervisors, the county sheriff basically campaigned for six months to convince the voters that they needed to fund county fire protection. And it passed with well over 2/3 of the vote. It takes leaders who are willing to tell people that there is no free lunch and who are willing to take risks in terms of their political careers. You know? There may be backlash from those that say our tax bill is already too high. We have had so little of that in San Diego for so long in terms of our leadership, and the failures of leadership extend to the private sector as well. The private sector in other communities, even in machine corrupt Chicago, you know? They're all about making needed public investments and services and infrastructure, and they're right there with the political machine. The conservative downtown business community, they speak in union son because they realize that's what will make a city work.
MAUREEN CAVANAUGH: Let's take another call. Chris is calling from Clairemont. Welcome to the show.
NEW SPEAKER: Hi. Yeah, I just had -- one comment, I -- the speaker mentioned a few times, he seems kind of outraged that taxes haven't been raised and people aren't going for a tax increase. But what he's kind of getting at, I think is San Diego's 800-pound gorilla in the room. And I'm speaking about the pension. People realize that if there's -- they up taxes, all this money is not going to go to improve infrastructure or go toward schools or libraries. All it's going to do is go toward these pension deficits. And in one of your early are shows, someone said something like that. Raising tax system like giving San Diego's City Council -- like giving alcohol to an alcoholic. So I kind of agree with that, and I guess I'll take the answer off the air.
KOGAN: That's a great question. If you look at the history of the pension problems in San Diego, the irony -- the paradox is that the reason why we have this massive pension liability, for many year, decades in fact, city leaders took earnings and money out of the pension system to pay for public services that voters got essentially for free. So compounded over decades we've gotten this liability that somehow voters think is somebody else's fault. They say it's because of greedy public employees that are getting sweetheart pensions. When in fact the underlying reasons we have this pension liability is that for many years we didn't put the money into the pension system we needed to put in. So in some way, you have this self-perpetuating problem. For many years we under fund the system, and now we say hey, we can't pay higher taxes because it's all going to go into the pension system.
CAVANAUGH: And what about the reform ballot initiative that is being proposed now that people are collecting signatures on? Is that a way to resolve this issue anyway? . There's a lot in that initiative. Very little what actually deals with pensions. As Steve pointed out, one of the things the initiative would do is take new hires, use of the employees, and instead of giving them a pension, it would give them a 401K. The problem is that our current pension liabilities is all about existing employees. And that would do absolutely nothing to deal with that liability. There is another part of the initiative that's controversial that would essentially give all public employees I five-year pay freeze. That is where most of the savings come from. It's not clear if that would be illegal, it's clear that would create a lot of lawsuits and take years to resolve. So it's not clear how much that initiative would actually deal with the problems that San Diegans face.
CAVANAUGH: We have less than a minute left, Steve. I just want to end this by asking, what responsibility do you think the voters bear for this?
ERIE: The voters bear responsibility as well as leaders. Look, we have institutions, right, whether it's term limits that encourage shortsightedness, whether it's prop 13, raising the bar, that make it in a sense more difficult to adequately fund services. But it's as much about voters, followers, as it is about leaders. But leaders should be in the business of public education. This is using the bully pulpit to point out what otherwise how many more water mains are going to break, how many more pot holes are not going to be repaired, etc. This is a bleak future we're looking at.
CAVANAUGH: Steve Erie, Vlad Kogan, coauthors with Steve MacKenzie of the book paradise plundered. Thank you for speaking with me.
KOGAN: Thanks for having us.